Expert View: Bush builds his Versailles as the poor go to ruin

Dinner on the roof of the Palazzo Scacchi, on a warm Rome night. Here, the cream of the Italian business and political elites mix in a cocktail of power. Nowhere is the intimate connection between those two worlds better understood. On this night, the British Ambassador to Italy's unguarded comment that "Bush is al-Qa'ida's best recruiting sergeant" finds unanimous approval. But the conversation is equally emotive as we discuss what his re-election would mean for the US economy.

Four years ago, most Europeans felt that in both foreign and economic policy there was little to choose between the two US presidential candidates. I disagreed, arguing that Mr Bush's agenda of tax cuts and aggressively increased military spending would be ineffective. I was wrong: it has been disastrous.

While the US economy has weathered the recession well in GDP terms, this has been "bought" by excessive government pump-priming. The results of this are seen in the US deficit, now approaching $500bn (£280bn). Worse, much of this money has been squandered on a privileged elite, and a failed policy.

Central to Mr Bush's economic agenda has been his tax-cutting programme. Four years ago, the "Compassionate Conservative" denied that only the richest would benefit and even dared to claim his was a "jobs and growth plan".

What a lie. Despite the arguments of numerous economic think-tanks, bankrolled by those who would benefit most, public cash has been handed out to those who need it least. Some 66 per cent of the money from the 2001 and 2003 tax cuts went to the wealthiest 1 per cent. If you earn $1m a year, you are nearly 7 per cent better off (compared to 2 per cent for those earning $50,000). Worse, those millionaires have not spent their gains and boosted growth, as Mr Bush promised.

To justify the first tax cut, he claimed there would be 3.4 million more jobs in 2003 than in 2000. In fact, the economy lost 1.7 million. In launching the second cut, he promised 5.5 million new jobs by the end of 2004 - since when the White House press secretary, Scott McClennan, has been reduced to admitting "the President is not a statistician". Quite: he will be the first President since Herbert Hoover to preside over a net loss of jobs.

Four years of Mr Bush have turned the social divide into a gaping chasm, for America 2004 is a tale of two societies. The US Census Bureau reported that 1.3 million Americans fell into poverty in 2003, so that nearly 36 million now live below the poverty line.

Does this Presidency care? Listening to Treasury Secretary John Snow begin an interview with, "it's great to get out and talk to business - talk to taxpayers", one gets the feeling that Mr Bush's remote elite just doesn't seem to get it. The economic policy priorities for the second term? Controlling healthcare costs, encouraging free trade and protecting business from personal injury lawsuits. Really?

John Edwards, the Democrats' vice-presidential candidate, rightly argues that Mr Bush's dangerous economic agenda is "not a plan to grow the American econ-omy ... (but) to corrupt (it), and to shrink the winners' circle in America". It is this, the creation by President Bush of a "new Versailles" amid worsening poverty, which I find truly appalling.

Our business elite, like the gentlemen on the roof of the Palazzo Scacchi, are well rewarded for their efforts. But this is done within a framework that is fairer and more supportive towards the opposite end of society. Opposing Mr Bush is not just about opposing his foreign policy, or his economic policy. Mr President, to alter a slogan that felled your father, "it's about the social divide, stupid".

christopher.walker@tiscali.co.uk